A small press should definitely use publishing contracts with its authors. A well-drafted contract will explain the author’s obligation to deliver an acceptable manuscript and the amount of royalties the author will earn for each copy sold. As the publisher, you should also protect yourself from potential lawsuits by having the author agree to defend you in any lawsuit. Because each small press has its own business needs, you should always show a sample publishing contract to a lawyer before using it with your authors.

Steps

Part 1

Beginning the Contract

1

Format your document. You should set up your contract so that it is easy to read. Set the typeface and size to something comfortable. Times New Roman 12 point is fairly standard, though you can choose any other legible style and size.

You also should publish the first page of your contract on letterhead, so leave enough room at the top of the page.[1]

2

Title the contract. You should title it something like “Book Publishing Contract” or “Publishing Agreement.”[2][3] Center the title between the left- and right-hand margins, at the top.

You can make the title bold and in slightly larger font so that it stands out.

3

Identify the parties to the contract. In the first paragraph, identify the parties and the date of the contract. If you intend to use this contract over and over, then you can include blank lines for information that will change with each contract, such as the name of the author and the publication date.

Sample language could read: “This Agreement (‘Agreement,’ ‘Contract’) is made on [insert blank line for the date], between [insert your name] (‘Publisher’) and [insert blank line for the author’s name] (‘Author’).”[4]

4

Include your recitals and consideration. Your recitals summarize why the parties are entering into the contract. These are often fragment sentences. Your consideration is what you each promise the other.

Sample recitals could read: “Whereas, Author desires that Publisher publish the Author’s work titled [insert blank line for title] (‘Work’), and Publisher desires to publish the Work.”

A consideration clause could read: “Now, therefore, in consideration of the promises set forth in this Agreement, the parties agree as follows.”[5]

Part 2

Granting Rights to the Book

1

Grant a right to publish and distribute the book. The most basic rights you will want as the publisher is the exclusive right to publish and distribute the book. Make sure to discuss electronic versions of the book as well. Sometimes, authors want to give only a non-exclusive right to eBooks. You should also identify how long the right to publish and distribute lasts.

Sample provisions could read: “Author grants to Publisher the exclusive right to publish, distribute, sell, and license the rights to all editions and/or formats of the Work, in whole or in part, in the English language.”[6]

You can include a clause specifically about eBooks: “Author grants to Publisher the non-exclusive right to Electronic versions of the Work.”

Also state the duration of the right to publish: “Author grants these rights to Publisher for a period of ten (10) years from the effective date of this agreement.”

2

Reserve other rights to the author. Authors will probably want an explicit statement that they retain any rights they haven’t signed over in the contract. You should include a clause to this effect.

For example, you could write, “All rights not expressly granted to Publisher in this Agreement are reserved by Author. In the day-to-day course of business, Author may use the ideas and concepts contained in the Work.”[7]

3

Identify the territorial scope of the contract. Contracts might apply only to specific regions, such as North America. Alternately, you could get worldwide rights to publish and distribute. Make sure to identify the territorial scope of the contract.

For worldwide rights, you could include: “Publisher may exploit the rights granted in this Agreement throughout the world.”[8]

Part 3

Identifying How Royalties are Calculated

1

Identify any advance and explain when it will be paid. An advance is a sum of money that publishers give authors before publication. The amount is then deducted from royalties earned. You do not have to give an advance. However, if you do, then you should state the amount and how it will be paid.

You might decide to divide the advance into thirds. You would then give the author one-third when they sign the contract, one-third when you accept the manuscript, and one-third when you publish the manuscript.[9]

2

Explain how royalties are calculated. You should lay out in detail how much you will pay in author royalties. You should do some research on other small publishers to find out how much they pay. Typically, the royalty is a percentage of each sale. A typical royalty scheme might look like this:[10]

10% of net revenues for the first 5,000 copies of all editions other than eBooks

15% of net revenues on the next 10,000 copies of all editions other than eBooks

20% of net revenues for any sales over 15,000 copies of all editions other than eBooks

25% of net revenues for the first 5,000 copies of eBooks sold

35% of net revenues for the next 10,000 copies of eBooks sold

50% of the net revenues on sales in excess of 15,000 copies of any eBooks

3

Explain the frequency of royalty statements and royalty payments. Authors will want to know how many copies they have sold and how much they have earned in royalties. You can explain in the contract how often you will send them a royalty statement. It will probably be easier to disburse royalties at the same time that you deliver the statement, so you should state if you are paying them at the same time.

If you want to send a statement every six months, then you can write: “Every six months following publication, Publisher will provide Author with a statement of monies received from sales of the Work along with payment of any moneys due to the Author.”[11]

Part 4

Explaining the Author’s Duties

1

Include a requirement that the author deliver a manuscript. You might sign a publishing contract with an author before he or she gives you a completed manuscript. In this situation, you need to make sure that the author agrees in the contract to deliver you a manuscript. Include the deadline for delivering the manuscript.

You could write, “Author agrees to deliver the manuscript to the Publisher by [insert a blank line for the deadline].”[12]

Also tell the author how the manuscript should be delivered to you. You could request: “The manuscript shall be in the form of a Microsoft Word document sent via e-mail, CD-ROM, or USB drive.”

2

Tell the author to get permission to use artwork. The book might contain art work or other material that is under copyright. You should have the author get permission to use this work. By having the author do this work upfront, you save yourself time and money.

Tell the author to provide you with copies of the written permission to use the artwork signed by the artist.

3

State that you have the right to reject the work. The book might be in terrible shape when it is delivered to you. Accordingly, you should reserve the right to reject the book. Include a provision telling the author how you will inform him or her of the rejection.

You could write: “If, at its sole discretion, Publisher deems the manuscript unacceptable, then Publisher shall advise the Author promptly by written notice. Author shall fix any defects and revise and/or correct the manuscript to the reasonable satisfaction of the Publisher, and shall deliver a fully revised and corrected manuscript after receipt of Publisher’s notice.”[13]

Part 5

Explaining Termination and Reversion of Rights

1

Include a termination provision. You also want to give yourself the right to terminate the contract if the manuscript isn’t delivered by the deadline or if acceptable revisions aren’t made to the manuscript. Tell the author how you will inform him or her, and also explain what will happen to any advance paid. Typically, publishers require that authors return the advance to them when a manuscript is rejected.

A sample provision could read: “If Author fails to deliver the manuscript or other materials required under this Agreement, or if the revisions and corrections requested by Publisher are not satisfactory, then Publisher has the right to terminate this Agreement. Publisher shall inform Author of termination by letter sent certified mail, return receipt requested, to the address of the Author set forth in this Agreement. Upon termination, the Author shall immediately repay Publisher any advance. All rights will then revert to the Author.”[14]

2

Give the author the right to terminate. You might want to give the author the right to terminate the relationship, even after publication. You would need to explain the steps that the author must take in order to effectively cancel the contract. Be sure to explain the following:

How the author should notify you. Typically, they should send written notice to the address provided in the notice provision of the contract. State that the author must explain why they are unhappy with the relationship.

Reserve a right to fix the problem. For example, you might want to give yourself six months to try and fix the problem so that the relationship can continue.

Explain that the author has to repay any sums (such as an advance) before the termination can take effect.[15]

3

Explain how the author can terminate if the book is out of print. Many authors want to get their rights back to books that are no longer in print. Your contract should explain how authors can terminate the contract when a book is out of print.

A sample provision might read: “If the Work is out of print in the United States, then Author may send a written demand to Publisher, who has 90 days to agree to bring out a new printing within a year. If Publisher does not agree to bring out a new printing, then Author may, after repayment of any overpayment of royalties or other sums due to Publisher, terminate this agreement without further notice.”[16]

4

Explain how rights revert after termination. In this provision, tell the author that all rights will revert to the author after the contract is terminated. If you’ve already printed copies, then you might want to give the author the right to buy unsold copies.

You might write: “In the event this Agreement is terminated, the rights granted to Publisher shall revert to the Author. For sixty (60) days after termination, the Author shall have the right to buy from Publisher all copies on hand at the cost of manufacture. After 60 days, the publisher shall have the right to sell the remaining copies not purchased by the Author for the best price the Publisher can obtain.”[17]

Part 6

Protecting Yourself from Lawsuits

1

Have the author make certain warranties. Warranties are promises the author makes to you. If the warranty turns out to be false, then you can sue for any damage you have suffered. Think about having the author make the following warranties:[18]

The work is not in the public domain.

The manuscript hasn’t been published before.

The work doesn’t infringe on anyone else’s copyright, trademark, or intellectual property rights.

The work does not contain obscenity or defamatory statements.

The author has engaged in diligent fact-checking and all statements of fact are true.

If the book contains instructions or advice, then those are sound.

The author won’t enter into any agreement that conflicts with the rights granted to you, the publisher.

2

Include an indemnification clause. Let’s say the author’s manuscript contains defamatory statements and he or she is sued. Because you published the statements, you can also be sued. However, if the author promises to “indemnify” you, then the author will pay to defend you in the lawsuit and absorb any costs you suffer.[19] You should include an indemnification clause—however, you should expect the author to push back on including this clause in the contract.

A sample indemnification clause might read: “Author shall defend, indemnify, and hold harmless the Publisher, its parent company, subsidiaries, and affiliates, from any and all claims, suits, debts, actions, demands, proceedings, and/or other claims which would constitute a breach of any of the warranties or representations or any other obligation of the Author under this Agreement, and any and all expenses, costs, losses, liabilities, and damages in consequence thereof.”[20]

3

Explain if the author is named on your insurance. You should have insurance as a small publisher. This insurance will protect you in case you are sued for copyright infringement, defamation, invasion of privacy, or some other claim. You can tell the author whether or not you have named him or her as an insured on your insurance.

If you have, you should include a provision like this: “The Publisher, at its own expense, shall name Author as an additional insured on any insurance policies Publisher maintains during the term of this Agreement.”[21]

Part 7

Finalizing the Contract

1

Insert a notice provision. You can spell out how each side is to give written notice. Explain how much advance notice they must give and the method of giving notice.[22] For example, you may want all notices sent certified mail, return receipt requested to a certain address.

2

Explain the effect of waivers. You might want to waive some provision of the contract. For example, you could extend the deadline for the author to get you a completed manuscript. However, you don’t want the author to think that because you waived one provision of the contract that you are automatically waiving all others. Accordingly, you should include a provision explaining this fact.

You could write, “No waiver of any term or provision of this Agreement, or of any breach of this Agreement, shall be construed as a waiver of any other condition, provision, or breach of this Agreement.”[23]

3

Include a choice of law provision. You get to decide what state’s law will be used to interpret the contract. Typically, businesses choose the state where they are located. You can include a provision to this effect in the contract:

“This Agreement is subject to the laws of the State of [insert state].”[24]

4

Add a severability clause. If you go to court with a contract dispute, then the judge might say that one provision in your contract is illegal. You want to clarify that the rest of the contract will remain in effect even if any provision is found illegal.

Insert this clause: “In the event one or more clauses of this Agreement are deemed invalid, void, illegal, or unenforceable, that shall not affect the validity of the remaining portions of the Agreement.”[25]

5

Include a merger clause. You need to make clear that the signed contract contains all agreements between you and the author. You don’t want the author claiming that there were prior oral agreements that contradict or supplement the written contract. You can include a “merger clause” to explain that the contract represents the entire agreement.

A merger clause should read: “This Agreement reflects the entire understanding between the parties and it may not be changed except by a writing signed by both Author and Publisher.”[26]

6

Insert signature blocks. You should include lines for the author to sign as well as for a representative of your publishing house to sign. Be sure to include lines for address, telephone number, and email address.

Just above the signature lines, include the language: “In witness whereof, Author and Publisher have executed this Agreement as of the Effective Date.”[27]

7

Show your draft to a lawyer. This article describes a basic publishing contract. However, your press’s needs might differ. Accordingly, you should show your draft contract to your lawyer and get his or her opinion as to what should be added or revised.

If you don’t have a lawyer, then you can find one by visiting your local or state bar association and asking for a referral. You can you’re your nearest bar association by visiting the American Bar Association’s website.[28]

8

Give the contract to the author. The author and his or her agent (if there is one) will want to look at the publishing contract before signing. They also might want to negotiate changes to it. You should give the author a couple of weeks to review the contract.

You shouldn’t sign any contract unless you agree with everything in it. If you and the author cannot come to agreement on all provisions, then you shouldn’t sign a contract with the author.

9

Distribute copies. Once you and the author sign, you should make a copy of the contract for the author. If the author has an agent, make a copy for the agent as well. You should keep the original in a secure location, such as a safe or fireproof filing cabinet.

You can also scan and create a digital copy of all contracts so that you can easily access them.